It is important that your customers can easily pay for their purchases. Wherever they live, they should be able to make an online payment. That’s why you must include all the necessary payment options in your store.

How can your store visitors pay for their orders?

Generally speaking, if your dropshipping store has a global reach, you must integrate two payment options into it:

Payment via credit cards;

Payment via PayPal.

If you target some specific geographic region, you can also use some local payment systems that work on this separate territory. But if you are not limited with a certain region and want to target customers all over the globe, it is best to use both credit card and PayPal payment systems.

As to our own dropshipping experience, nearly 50% of our buyers pay for their orders via credit cards. If your dropshipping store doesn’t accept payments made through credit cards, you lose up to 50% of your potential profit.

Not that great, eh?

What is more, there are countries where PayPal payments are not available at all! It means that credit cards payment is the only possible option for people on these territories.

It means that you must do your best to integrate a credit card payment system into your dropshipping store if you want to work with your customers all over the globe without any troubles.

Integrating credit card payment systems into your dropshipping store

There are various solutions that can be used in your online store for processing credit card payments. But their functionality varies a lot for different countries.

For example, we know that there are countries where local laws oblige store owners to show the total bill on checkout page in local currency only. It seriously limits the choice of suitable credit card processors.

This is why for our own dropshipping stores, we decided to work with some of the payment processing companies from abroad.

If you use these systems, for example, Authorize, 2checkout, Stripe, etc., your store gets an option of taking credit card payments, which is great both for you and for your customers.

Still, these systems are also tricky.

For example, there is a system called 2checkout. Anyone from anywhere on the globe can register in it, even a private individual without an officially established company.

But 2checkout has some really strict regulations. The company staff looks into your store in detail, and pays attention to EVERYTHING. Are you trying to sell branded items? Does the contact information match the contact details you provided upon registering? Does your business niche have a high risk of refunds? These and many other issues are carefully viewed, and your application can easily be denied.At first, 2checkout didn’t even accept registration applications from dropshipping stores as the company didn’t trust them enough. Now the situation is a bit different – 2checkout is more tolerant to dropshipping business. In the end of 2016, they made a statement they are now supporting AliExpress dropshipping stores.

We have tested 2checkout on several dropshipping stores we have, but for some reasons it wasn’t really convenient. Instead, we preferred a system called Stripe, because:

It’s much quicker to register in Stripe;

Stripe is more convenient from the technical point of view;

You pay much lower fees;

You can get cash payments much sooner.

What is Stripe and how does it work?

Stripe is a very popular and advanced technical solution. It is a payment processing system that lets you accept credit cards on your sites.

Using Stripe, you can allow your buyers place an order and make a payment via a credit card directly on your website. They are not transferred to any other websites, so they quickly and easily make an on-site payment. It doesn’t matter what is the country where your customers live.

Stripe views your application automatically, so the registration process is much simpler than with 2checkout. They don’t ask you any additional questions, so you will definitely get your registration.

So, if you are not a resident of one of these countries and do not have a local bank account, technically you can’t use Stripe service.

But even if you live outside this region and Stripe does not provide its services in your country, there’s still a way out. You can register dropshipping business in any of the countries where Stripe works, and get an access to it. We decided we will register our business in the USA because it’s much easier than in other countries supported by Stripe.

To put it simply, there’s the whole process for those who lives outside the US:

Your client makes a purchase from your dropshipping store and pays for his order with a credit card;

His money goes on your Stripe account;

Money on the Stripe account is transferred to your Payoneer account;

You use a credit card from Payoneer to pick up your money from any ATM.

Sounds tricky?

It’s actually quite simple.

Here are the 4 steps you need to go through:

Register dropshipping business in the US;

Open Stripe account;

Register with Payoneer and apply for a virtual USA bank account;

Connect your USA bank account to Stripe.

So let’s go through the details!

Registering your company in the US

First of all, let’s think of the corporate structure for the business you’ll register.

Choosing among different business entities in the US, the LLC (Limited Liability Company) seems the most convenient one and it is easy to start up. It has no corporate taxes and no limitations on who may be involved, and it can be managed by its members or by managers. Besides, it is well-suited for companies with a single owner.

Registering LLC is a rather simple process. You can find many companies which offer such service (we can recommend myusacorporation.com and myllc.com). You don’t need to present any documents – just submit your corporate information online. You also don’t need to travel to the USA to register a company. All filings can be done remotely, electronically.

What is also important, as a foreigner, you are not required to have Social Security Number to open your company and obtain EIN (company tax ID). You also don’t need to have a US address or phone number, however if you like it’s possible to obtain them from specializing vendors (around $250 per year).

All the process usually takes around 3 weeks and will cost you around $400-1000 depending on the US state you register in, and on other additional options you will choose (for example, creating virtual mailing address, etc.).

Please be careful – there are states where you must pay very high taxes on your business! We didn’t know it at first, and registered our company in California. Later we learned that in California you must pay at least $800 per year as a business tax, and also really high California state taxes. Not that good, right?

Take some time to research USA state taxes, and choose the state with the lowest taxes. Please note that these laws may change from time to time. At the moment of writing this article, we know that in Nevada and South Dakota there are no state and business taxes at all.

Once your LLC is registered and you got your company EIN (company tax ID), it’s time to proceed with Stripe account.

Opening Stripe account

As soon as your company is registered, your business receives a tax ID.

Using this ID, you can register in Stripe.

Simply visit Stripe.com and register your account. After it is registered, you need to activate it by filling an account application. Enter your US company details (including EIN), your personal details, and a digital copy of your ID. In a few days you should be approved.

Now you can use Stripe gateway on your store and accept credit/debit card payments from your customers! All payments come directly to your Stripe account and you can easily withdraw funds to your US bank account.

Stop! How will you get a US bank account?

After 9/11 and with the passing of the Patriot Act it became really hard for foreigners to open U.S. bank accounts. Only a trip to the US would present you with the best opportunity to open a bank account.

But we have a solution for you!

Registering with Payoneer

In most cases what you need is not a bank account, but the functions provided by a traditional bank account. For this purpose, you can use a reloadable prepaid debit card from companies like Payoneer.

What you get is an internationally recognized debit card and a virtual Bank of America account with routing and ABA numbers that you can easily connect to your Stripe account and withdraw funds directly to your debit card.

All you need to do is register with Payoneer.com and connect Global Payment Service to your Payoneer account in order to get a virtual US bank account.

Connecting your USA bank account to Stripe

As soon as you have connected Global Payment Service to your Payoneer account, you can use this private account to take some necessary data.

Then, you need to access your Stripe account, and go to the Payouts section. In this section, you need the Settings tab – here you add your Payoneer account number.

That’s it.

Now the money you get will be transferred to your Payoneer account.

When you register in Payoneer, the company sends you an internationally recognized debit card through ordinary mail. So you take that plastic card, go to any cash terminal, and FINALLY – you’re holding the cash in your hands!

Benefits and advantages for your dropshipping business

So after all, you have your own limited liability company registered in the USA.

It doesn’t cost that much: for our first US company, we paid $634 for LLC registration, and $299 for the USA business and mailing address.

It doesn’t take long: in our case, all the procedures took about a month.

And for all that, you get several meaningful benefits for your dropshipping business:

You can earn twice as more as you previously did because you now accept credit card payments;

Your business is now fully legal. It’s registered in a real place in a real country, it has a tax ID, and all that.

You now have a company in the USA! How cool is that?

You have a virtual account where all the money from your buyers is stored. It’s convenient to use and easy to understand.

You can rightfully use a convenient payment system. You can transform all the money into real cash, and use it the way you want.

We hope all this information will be useful to everyone who doesn’t live in the USA but wants to register their business in this country. As you can see, registering your dropshipping company in the United States is not that difficult. Instead, it lets you get a lot of legal advantages, and also deal with money easily.

If you have any questions, notes, or your own tips – please leave them in the comments section below! We are always happy to receive your feedback because it lets us make our guides and articles even more helpful and useful.

Registration

By
Olga L.

Olga is a content creator at AliDropship, and she aims to explain the most complicated drop shipping concepts in the simplest terms possible.

Actually, this is a good review. But there are certain things you will need to amend or review and update so that it will be a complete guide for people who wish to open a company in US.

a) The best state to open a simple LLC Foreign Entity is WY (WY has less rules and annual costs are very low)
b) The formation cost will differ but most in line with 375 – 450$ (A basic)
c) Stripe need a physical address
d) Stripe does not support drop-shipping business. This is the feedback I got from Stripe. You need to state how to overcome that as Stripe considers it as high risk since the account holder does not have any control over the stocks!!!
e) To obtain an EIN from IRS, it usually takes 4-6 weeks. (In WY company formation takes only 1 day)
f) Even if there are 0% income tax, there are statutory filings with state which is very important. Need to know these things with a CPA. Hence, it is vital that you know them.

I think this is a good article and very informative. I would like to suggest that if you can address the following concerns also and incorporate them to the original doc, then one shot the readers will be able to educate themselves.

Yes, let’s talk about it! When Opening the Stripe account I decided not to lie and tell them my business model. They declined my account as it is high risk business to them.. I had nothing brander, nothing high risk, but I didn’t have my own stock. It clearly says in their T&C. I opened Stripe under other business, but I never know when I’ll get suspended.
ALSO, Stripe does not accept virtual bank accounts. AND Payoneer DOE NOT accept payments from your own accounts. So I really don’t understand why all gurus talking about Payoneer + Stripe. Maybe it only works because somehow they have’t noticed yet. In this case it is walking on thin ice!

I know at least 14 people that are having allot of trouble get paid via these virtual Payoneer accounts, even stripe tell u it is not advised due o them been a virtual bank and the high bounce rate they encounter, think twice before you do it

If a Canadian friend registers as an Individual/Proprietorship, does he still need to pay taxes, how does that work, can you explain a little bit more, or point to some articles where is described? Thanks

HaniJune 11, 2017 16:28:53

Kindly clarify how
“connect Global Payment Service to your Payoneer account in order to get a virtual US bank account.”
I didn’t understand how to do it.
Thanks

You can receive money with Payoneer.
1. Register US LLC
2. Open Stripe account using your LLC
3. Open Payoneer account and get a debit card
4. Withdraw money from Stripe to your Payoneer account
5. Withdraw money from your Payoneer card from any ATM in your country or transfer money from Payoneer to your local bank account.

I found an interesting article that affects all Non-U.S. residents that set up a LLC company in the U.S. (Delaware, Wyoming or Nevada) and sell in the U.S.

Presently there is a lot of confusion amongst tax proffesionals whether you have to pay tax on U.S. source income. Please check out this link from a tax attorney explaining why they misinterpete the tax laws. http://ustax.bz/non-us-entrepreneurs/

Actually there is a problem related to linking Stripe with Payoneer.. when a customer asks for a refund you cannot give him back his money once it’s transfered to your Payoneer account and this will lead to some issues with Stripe that you don’t want!

Just wondering whether one business registration is for one niche? Or is it possible to register an umbrella type business (with a more generic name), that could cover a possible range of niches? So multiple income streams could flow into a Stripe (or other) account. Is this possible? For example, My Pet Biz could cover incomes from mydog.com, mycat.com and myrabbit.com.

If I create a Stripe account via a US friend registers as an Individual/Proprietorship, does he still need to pay taxes?
Also when connecting that account to a Payoneer account, is it possible to connect a Payoneer account the created in someone else’s name?

1) if i registered llc with one of the “myusacorporation.com and myllc.com”
am i still need to have a physical address or phone number?
2) if i run 2 stores, is it enough to have only 1 LLC ? can i use same stripe account ?
3) if stripe request ” US resident document” for verification purposes, how can i go through with it?

1. It is better to register a virtual address to get necessary documents. It costs $100-200 per year.
2. Yes, you can run any number of stores under one single LLC.
3. When you register Stripe through your US LLC, you will only need to provide your company EIN and address (virtual).

Yaros, thank you for this detailed post. It is really helpful to us. I got a couple of questions.

1 – When applying for stripe and using stripe do we use a US Ip of the State where the llc is registered?
2 – When stripe asks for ID docs or verification. What do we do then because they would know that we’re not US citizens.

Six states, North Carolina, North Dakota, Colorado, Mississippi, South Carolina, and Utah, have top rates at or below 5 percent. Nevada, Ohio, Texas, and Washington impose gross receipts taxes instead of corporate income taxes.

Hi, Stripe does not support deposits directly to your Payoneer account but it supports deposits to your virtual bank account created on your Payoneer account. Please review the article again paying attention to the Global Payment Service you need to register with your Payoneer account.

thank you for this I was struggling to find a solution from months, in my country I can only work with paypal. Now I have a question : can you business adress (used to create your llc) in a different state than the one where you regiter your llc? In my case, I will go for Wyoming, and use a PO Box as business adress, but my PO Box is in Florida, is that a problem?

Hey Yaros,
Amazing Article. Thanks for being so helpful to the whole community. Which US state should I register my LLC in. And is there any company who handles all tax concerns . Please post a link.Thanks

yaros thanks for the help you are giving to the community,you are awsome.So if I understand you good you can open US stripe account if you are not from the country that stripe supports by incorporating US company and adding Payoneer Global Payment Service US bank account,for SSN you use the last 4 digits of EIN,but what if they request verification of your identity and you are from Croatia? You send them your real identification documents right? I only want to know is this model totally approved and legit by Stripe also.Best regard and thanks in advance.

Hello,
As I know drop shipping has prohibited by stripe, did you guys have any problem about this? are you still able to use your stripe account? what if stripe understands you are a dropship business?
please share your experiences,
thanks in advance

Hey,thanks for great value!On payoneer when applying to Gllobal Payment Service they ask about your source of income/website/describing what are you doing etc.Do you tell them about ecommerce and just link your real website there,or tell them you are freelancer from fiverr,upwork etc?

The only problem is: Payonner sometimes assigns a number of a bank account that does not receive Stripe, is there a way for payonner to change it?
Assigns me a bank called: Firts Century Bank and the route number does not accept it

My friend and I have the same routing number. He opened a stripe account a month before I did. His routing number and a bank account were accepted by Stripe, mine wasn’t.
I am not sure what was the problem. Has Stripe changed some of its policies?

Hi Yaros,
I live in Canada and am researching the steps I need to take before opening my first online drop-shipping store. Is it necessary for me to go through the process of opening a Stripe account in the U.S. to target the U.S. market or have the convenience of Payoneer payouts…or can I just register my business in Canada? 1. Is it not basically the same thing? 2. Does Payoneer only work through a U.S. bank account? 3. Are there any disadvantages to registering in Canada instead of the U.S. ? Thank you so much for your feedback!!

1) I was wondering if you or other have experience using “usformation.com”. The problem is they seem too good to be true, in their $399 “kit” they include US bank account, phone, and physical address plus other features. According to the services recommended by Olga (myusacorporation.com); one of their articles said “don’t trust those services who offer to open an US Bank Account, usually they are fraudulent, because the new law after 11S doesn’t allow it”, they recommend payoneer.

2) I was checking the “myusacorporation.com” packages but there are many options there to choose, or is enough with their “Basic Package” as is?

3) Which state do you recommend Wyoming or Delaware

4) Which services do you recommend to Phone Verify Stripe accounts?.

5) Which Physical Address service do you recommend?, is it necesarry to pay for it forever or just 1 or 2 months while stripe verify it?

Thanks for the info bro…this is pure gold.
I have this one question though? What happens if a chargeback is requested…..I hear that payoneer bank account won’t do reverse transactions and without it happening, you can no longer withdraw money from stripe……it’s not like a regular refund where you can just pay back the customer by whatever means, chargeback occurs when customer/client directly requests a refund from stripe right? I don’t know much about it but how do you deal with this kind of situation? :)﻿

Thanks for very informative article. This seems like a solution of payment problems for many non-US online entrepreneurs. However, if you try to sign up with Payoneer as a company, you will be required to provide US bank account details in the last page of the sign up process (the one that’s called “Almost Done”). It does not let you to skip that part. Nor does it let you to change the country once you are signing up as a US company.

How to solve that? I have been researching the internet for guidance but found nothing useful.

Or shall I sign up as an individual? And use personal bank account from Payoneer for a US company?

Hi Yaroslav,
Great article! Many thanks.
As a non US resident,
1- there is any restriction to use the money in my country?
2- Do I need to justify it as my LLC’s expenses?
3- Can you share with me your CPA contact to deal with?

1. – there are no any restrictions on using your money in your country.
2. – you can hire workers in your country, pay them from your dropshipping income and add it to your US LLC expenses.
3. – info@svs-cpa.com

First of all, pretty well written and very informative article Yaros, way to go!

I just have one question at the moment, if I’m not a US citizen and I don’t live in the US either, but I have family living there, can I use their address when signing up on Stripe and avoid paying for the address service?

Thank you so much for these useful information!
I’d like to know please by using Stripe as a gateway and linking it to Payoneer, how many days does it take to be able to use Payoneer to pay online or to withdraw from an ATM? In other words, how many days does it take to have the money from Stripe to Payoneer?

Does this still work in 2018? I heard people saying Stripe does not support Payoneer and are banning accounts who are using it, which doesn’t make sense because we are LEGALLY registering a business in US and paying our taxes regularly. Can anyone please confirm this? I really want to try this.

Nice Article SOme Clarification needed. First, it is stated that as a foreigner, you are not required to have Social Security Number to open your company and obtain EIN (company tax ID). There after when Opening Stripe, You inform that to register as LLC and enter EIN. Both seems contradictory. Let me come to my point. Im from India, and Plan to do Drop shipping. I need stripe.

Guess that I have US VIrtual Address, and Payoneer account ( I have both)
1. When Registering Stripe I should give my address as US address or Indian Address ?
2. I dont have ID Proof at US
3. As you first mentioned, foriginers dont need EIN. then how I register with Stripe ?
Hope to get a detailed reply. Thank you

Hi i have a problem with my stripe account recently i got my first money ,i have a LLC open in wyoming state i also have a bank account at bank of america as a business address i put the address that they gave it to me when i open the LLC, now in order to process the payment they ask me for a utility bill or rental agreement at the company address , i am not US citizen and never been to wyoming what documents can i provide them , i have all the documents from the LLC

Can I dropship through AliExpress to the US whilst being (business) based in the UK? Or do i necessarily have to start another company in the US. Will I have to pay taxes in the US even though i am already paying in the UK?

Huge thank you for article, I am following it step by step right now =) I will highly appreciate if you can ask few following questions:

1. May I ask you, is this sheme still working on your side?
2. It seems that Payoneer gives virtual bank accounts randomly, I got First Century Bank, not Bank of America. Does it make any difference? Please share your experience here.
3. Maybe you have an idea, can other person open US bank account (being in US) on my behalf, having all my LLC document, EIN and notarized power of attorney? Maybe you did it or heard about such case? Thank you in advance for any details!

other than the two organizations that are mentioned to register LLC … I fund some other LLC registrar who is providing the registration for free… are those safe or okay if I register LLC through them some of them are… http://www.incforfree.com/https://www.free-llc.com/

there are tons of services on Internet that offer a virtual US address and phone, it will cost around $100 per year. As for SSN you will not able to get it if you are not a US resident or have a working US visa.

I will use my Payoneer card for making orders on Aliexpress. But the card has its limitations to 9 transactions per day and 2500$ of total spending.
What if I will get more orders for more than 2500$? How can I increase my Payoneer card limitations?

Hi Yaroslavsky,
I am confused about two things, Sales tax, and Income tax, I wanted to Open LLC in Alabama State I did not see any Tax Information on the official website of Alabama state, I am not living in the USA neither I am US citizen. “”” If I want to open LLC in the USA do I need to pay Income or sales tax ???? “””
Thanks In Advance.

I have registered my LLC in Wyoming and I got the EIN number, but on the Stripe, they ask you also for your home address. Should I enter my actual address?
I entered my business address in Wyoming but what about my home address?﻿
I am afraid that if I put my home address in Poland they can reject me.

it is neccesary to register our company in US LLC ? if i take payment through paypal not stripe …..
i don;t want to pay 400-600$ for registering to company to us llc .
can i take payment thr. paypal as paypal is mostly use in usa

Hi Yaro,
Thanks for this details, please I would like to know if it is possible to use a business already registered by family in the US to register with stripe and when filling personal information whose details would be there, mine or my relative?